We spend more on vacation than before the COVID-19 outbreak
Hungarian residents spend HUF 130,000 more on summer holidays than before the COVID pandemic, according to the latest survey by MKB Bank. Compared to the results of the 2019 survey, the proportion of people going on holiday has increased significantly, and it is also striking that more and more people are spending over HUF 200,000 during their vacation. The majority of respondents use their savings to cover the cost of their holiday, 95% of those travelling abroad plan to pay by credit card and more people are turning to credit products before going on holiday. Credit cards are the most popular financing option among respondents.
More and more of us are going on summer holiday and spending more
After a two-year hiatus, the banking group has conducted a trend survey on the vacation and related financial habits of the population in 20221, revealing that 78% of respondents go on some form of holiday during the year. This is a significant increase from the previous result in 2019, when only 64% of respondents planned to take a holiday that year.
In addition to the significant increase in travel, the amount of money spent on holidays has also risen sharply, from HUF 169,000 to HUF 301,000. However, the proportion of people who plan to spend between HUF 50,000 and HUF 100,000 on their holiday has decreased by 11 percentage points (2019: 17%, 2022: 6%), while the proportion of people who plan to spend more than HUF 200,000 has increased by 17 percentage points (2019: 38%, 2022: 55%).
August remains the most popular month for holidays, with half of those surveyed looking exclusively for relaxation in Hungary, while 15% only consider options abroad. The proportion of those choosing the seaside for their holidays has increased by 4 percentage points compared to 2019.
Most people (43%) are planning a holiday of five days or less, but more than a third of people are planning a holiday of 6-10 days, and nearly a quarter of them are planning a holiday of more than 10 days.
Credit card: the most commonly used loan for holiday
According to the survey, the vast majority of people (82%) use their savings to finance their travels. The proportion of people using their SZÉP Card has increased: 22% of people used their SZÉP Card for certain payments on holiday in 2019 and 26% will use it in 2022.
Looking at the financing solutions used for holidays, it appears that credit cards are the most popular product among the survey respondents. This is partly due to the fact that there are a number of unplanned costs that can arise during a holiday for which it is good to have a credit card. For instance, this is the case for car rental, as car rental companies typically only accept this payment method.
"During the summer holiday season, people may need to access additional funds in the most convenient way possible, and a credit card is an excellent tool for it. The advantage of some schemes is that they offer cashback after spending, so customers can get back thousands of forints a month from their bank. For example, MKB Bank also offers a product that provides extra reimbursement up to a certain amount in categories that are among the classic holiday expenses, such as entertainment, restaurants, tickets or even petrol station purchases," said Péter Somogyi, Managing Director of Retail Business Development at MKB Bank.
There has also been a shift in payment methods since the last survey. A recent survey shows that, presumably as a result of the COVID epidemic, people prefer to pay by card on vacation rather than by cash. For all types of expenses (travel, accommodation, meals, tickets and other costs), the proportion of people who prefer to pay by card is above 40%. 95 per cent of those travelling abroad said they do not leave their debit card at home and 68 per cent also make sure they take an embossed card with them.
Respondents were also asked how they would handle their bank card if they had any problems with it: 40% would log in to their online banking platform, 37% would use the mobile app of their bank and only 15% would call the customer service line. Only 4% would look for a bank branch in the vicinity of their holiday destination, showing the growing popularity of electronic channels.
Mobile payments are on the rise, but smartwatches are still something for the future
The rise in popularity of mobile payments, especially among young people, is quite striking: a third of people regularly use mobile payments in their daily lives, and only 18% of them said they do not use mobile payments during their vacation.
Smartwatch payment is still less widespread: 11% of respondents use it in their everyday life, and they also like to pay with their watch while on holiday.
It's not uncommon to overspend, we mostly save on the quality of accommodation
71% of those surveyed have spent more than they had planned on their holiday, and most (74%) have used their own savings to cover this. In such cases, 23% of respondents use a debit card, 13% use a credit card and 2% use other sources to cover overspending.
Survey respondents were also asked what they would be the first thing they would save on if they had to cut costs on vacation. Most would look for a lower category of accommodation (47%), followed by those who would shorten the duration of their holiday (38%), choose a cheaper way to travel (34%), save on food and drink (28%) or programmes and tickets (25%), and 24% would be willing to choose a less popular holiday destination if they had to cut the cost of their trip.
Almost as many people take out insurance as do not
54% of those surveyed said that they usually, if not always, take out travel or accident insurance before going on holiday, while 46% said that they do not do so at all.
It also found that people are more likely to take out insurance if they have experienced an inconvenience on a previous holiday. The majority of respondents (66%) had not experienced such a problem.
1The annual survey of retail trends in holiday and related financial habits was conducted by Budapest Bank, member bank of Magyar Bankholding, and was last conducted in 2019.
With over 70 years of market presence, MKB Bank is one of the leading players in the Hungarian banking system and the domestic financing market. Its aim is to provide its customers with financial services in the simplest, quickest and most professional way possible – with the widest possible range of state-of-the-art solutions. The Bank has a traditionally strong corporate and private banking client base, with advisory and analytical capabilities. The core value of the bank is to serve its clients professionally, with a focus on customer relationship and experience, value preservation and creation, and innovative banking solutions.
On 31 March 2022, the bank merged with Budapest Bank, which has been a dedicated partner of Hungarian small and medium-sized enterprises for decades, in addition to retail services. The merged MKB Bank, which is 100 percent Hungarian-owned, provides a full range of financial services to households and businesses through a nationwide network of 143 branches and 184 ATMs in 66 cities.
Together with Takarékbank, MKB Bank is a member of the Hungarian Bankholding Group, about which you can find more information at www.magyarbankholding.hu.